Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive from a year ago, driven by a significant reduction in capital expenditure, though revenue and operating cash flow declined. Sequentially, free cash flow decreased as revenue and operating cash flow fell, partially offset by lower capital spending.
- Revenue decreased compared to both the prior quarter and the same quarter last year. Operating cash flow also declined, but capital expenditure fell more sharply, resulting in positive free cash flow and a margin that improved from a year ago but weakened sequentially.
- Compared to the previous quarter, free cash flow and margin were lower, driven by lower revenue and operating cash flow. Compared to the same quarter last year, free cash flow improved from negative to positive, and margin turned positive, despite lower revenue and operating cash flow, due to a substantial reduction in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$876.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$221.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$362.2M
Cash generated by operations before capital spending.
CapEx
$141.1M
Capital spending and related asset purchases.
FCF margin
12.7%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2023-09-29 | $2.2B | $566.6M | $433.0M | $133.6M | 6.1% |
| 2023-12-31 | $2.0B | $611.2M | $354.0M | $257.2M | 12.7% |
| 2024-03-29 | $1.9B | $498.7M | $233.9M | $264.8M | 14.2% |
| 2024-06-28 | $1.7B | $362.2M | $141.1M | $221.1M | 12.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 65.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.1B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Reduction
Capital expenditure decreased substantially from both the prior quarter and the same quarter last year, which was the primary factor enabling positive free cash flow in the current quarter despite lower revenue and operating cash flow.
The lower capital expenditure directly improved free cash flow and margin, turning them positive year over year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased compared to both the prior quarter and the same quarter last year. Operating cash flow also declined, but capital expenditure fell more sharply, resulting in positive free cash flow and a margin that improved from a year ago but weakened sequentially.
Compared to the previous quarter, free cash flow and margin were lower, driven by lower revenue and operating cash flow. Compared to the same quarter last year, free cash flow improved from negative to positive, and margin turned positive, despite lower revenue and operating cash flow, due to a substantial reduction in capital expenditure.
Monitor the trajectory of capital expenditure, as the significant reduction was a key factor in the free cash flow improvement, and the filing notes that capital spending is primarily directed towards manufacturing equipment.